The Reserve Bank of India will launch digital payment systems for feature phones. The RBI Governor Shaktikanta Das announced the plan to start UPI-based payment. He has also announced to exceed the limit of transaction using UPI from Rs.2 lakhs to Rs.5 lakhs for RBI’s Retail Direct Scheme.
Unified Payments Interface- UPI is the most popular way of payment using smartphones. To make online payments even more inclusive this step has been taken.
Around 118 crore (TRAI, October 2021) Indians own a mobile phone. Out of which, around 74 crore users own a smartphone and rest are still using a feature phone.
Why UPI payment method in Feature Phones?
Feature phones are the basic devices that don’t offer as many functions as a smartphone has.
Not everyone can afford a smartphone, to make it easy for everyone to use UPI payment methods, RBI decided to launch digital payment systems in feature phones too.
RBI says this is being done to deepen and make digital payment methods more inclusive. Also, to enhance the capacity of service providers, and make transactions easy for customers, this step has been taken.
RBI Governor Shaktikanta Das also discussed the reasons to launch this UPI payment method in feature phones. It is proposed to:
- launch UPI-based payment products for feature phone users, leveraging on innovative products from the RBI’s Regulatory Sandbox on Retail Payments
- make the process flow for small value transactions simpler through a mechanism of ‘on-device’ wallet in UPI applications, and
- Enhance the transaction limit for payments through UPI for the Retail Direct Scheme for investment in G-secs and Initial Public Offering (IPO) applications from ₹2 lakh to ₹5 lakh
“UPI is the single largest retail payment system in the country in terms of volume of transactions, indicating its wide acceptance, particularly for small value payments”, he added.
RBI to keep repo rate unchanged
The Central Bank will allow banks to fill up the coffers of overseas branches, and repatriate profit without its prior consent, the Governor announced. In RBI’s recently reviewed bi-monthly policy, it has kept repo rate unchanged.
“Monetary Policy Committee (MPC) voted unanimously to keep the policy repo rate at 4 per cent and the stance remains accommodative. Marginal Standing Facility (MSF) rate and bank rate remain unchanged at 4.25 per cent. Reverse repo rate also remains unchanged at 3.35 per cent,” Reserve Bank of India Governor Shaktikanta Das.